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Author: [Politics] Topic: Why was the term "rent seeking" banned from public discourse in politics?
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#1
Posted: 2/14/2012 8:52:22 AM
Why don't the people that control the flow of information, that decide what you will be instructed in the schools, allow education about what rent-seeking is and how it effects Capitalist society?


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The simplest definition of rent-seeking is the expenditure of resources attempting to enrich oneself by increasing one's share of a fixed amount of wealth rather than trying to create wealth. Since resources are expended but no new wealth is created, the net effect of rent-seeking is to reduce the sum of social wealth.

Rent-seeking generally implies the extraction of uncompensated value from others without making any contribution to productivity. The origin of the term refers to the gaining control of land or other pre-existing natural resources. In the modern economy, a more common example of rent-seeking is political lobbying to receive a government transfer payment, or to impose burdensome regulations on one's competitors in order to increase one's market share.

Studies of rent-seeking focus on efforts to capture special monopoly privileges such as government regulation of free enterprise competition.[1]


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#2
Posted: 2/14/2012 10:14:21 AM
i believe they just call it "capitalism" now...



some of us call it cronyism or corporatism. same thing
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#3
Posted: 2/14/2012 10:15:08 AM
not sure if you're able but Tom Woods is hosting peter schiff's radio show today

schiffradio.com

well worth it. my econ geek out moment is meeting woods in nyc last september
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#4
Posted: 2/14/2012 10:31:24 AM
You are speaking in very complex terms..how would you expect the average guy to know what the hell this is all about?

They think rent-seeking is people trying to find an apartment to rent.

To educate those unfamiliar with this complex concept it might be better to elevate them to more basic concepts and move up from there versus jumping from zero to the third floor and wonder why they dont get it.
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#5
Posted: 2/15/2012 8:18:50 AM
QUOTE Originally Posted by KOAJ:

i believe they just call it "capitalism" now...



some of us call it cronyism or corporatism. same thing


it does seem that many confuse rent seeking activity as capitalistic activity, but i'm not sure that it's the same thing as fascism as you insist. Yes, regulatory capture and profiteering from government protection is 'rent-seeking' activity, however, i wouldn't necessarily say they are one in the same

although 'what we have now' definitely resembles closest to fascism, and the economy is certainly being slaughtered by rent-seeking activity. Someone needs to explain it to those 99% ers
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#6
Posted: 2/15/2012 8:23:20 AM
QUOTE Originally Posted by wallstreetcappers:

You are speaking in very complex terms..how would you expect the average guy to know what the hell this is all about?

They think rent-seeking is people trying to find an apartment to rent.

To educate those unfamiliar with this complex concept it might be better to elevate them to more basic concepts and move up from there versus jumping from zero to the third floor and wonder why they dont get it.


i'm not sure that it's very complex terms. People flounder over complex subjects every day (recently, inflation). Rent- seeking is a rather simple concept. A market free of rent-seeking = a free market. The simplest way to identify rent-seeking activity is, when you are engaging in economic activity, if someone is forcing you to pay their toll before you are allowed to pass on the economic highway, than that is rent-seeking. And it seems anymore, our governments primary function is to protect the rent streams of those that have built their toll booths, on public roadways none-the-less

As to educating folk from the bottom up, i have tried different approaches, with no luck.

Maybe you can help out, as you seem to know your textbook economics quite well. I'll 'teach the class' on the tenets of classical economics, and seeing as how you like to side opposite me on everything, you can be the counter weight, deal?
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#7
Posted: 2/15/2012 9:05:45 AM
Classical Economics, A Primer

I invite everyone to participate, however, you will first need to cleanse your mind of all your neo-classical assumptions. You might even need to stay open to the possibility that you were wrong about some things, admit to it, and learn something new. The hope is that after seeing the differences between a science based approach to political economy (classical econ) compared to the world of liars, frauds, fuzzy numbers that is neo-classical econ, that you will be able to "see the cat".

How can you see the cat if you aren't even looking for him?
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#8
Posted: 2/15/2012 9:10:18 AM
Science based political economy, Classical Economics, The Primer

ECONOMIC AXIOMS

1. Man seeks to gratify his desires with the least exertion

2. Man's desires are unlimited

ECONOMIC DEFINITIONS

POLITICAL ECONOMY - The science of the nature, production, and distribution of wealth

WEALTH - All material things produced by human labor, having exchange value

LAND - All the material universe outside of man and his products

LABOR - All human exertion in the production of wealth

CAPITAL - Wealth used in the production of more wealth

       WEALTH IS DISTRIBUTED AS -
             
               RENT - For the use of land
              WAGES - for labor exerted
              INTEREST - for the use of capital

      MARGIN OF PRODUCTION - the most productive land obtainable without the payment of rent

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#9
Posted: 2/24/2012 3:49:23 PM
why is it so hard to see the cat
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#10
Posted: 2/24/2012 3:56:28 PM
so what should the role of government be?
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#11
Posted: 2/24/2012 4:10:45 PM
QUOTE Originally Posted by ClubDirt:

so what should the role of government be?


To protect the aristocracy by insuring their landed wealth?

sorry if that doesn't answer your question, but i'm not certain it's really on the topic
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#12
Posted: 2/24/2012 4:22:03 PM
well i'm assuming you're saying many, if not all, government officials and people who profit indirectly from the government are rent seekers.  if so, what should their role be, if any?
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#13
Posted: 2/24/2012 4:38:53 PM
bcuz it rhymes with the words heat seeking
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#14
Posted: 2/24/2012 4:44:44 PM
QUOTE Originally Posted by ClubDirt:

well i'm assuming you're saying many, if not all, government officials and people who profit indirectly from the government are rent seekers.  if so, what should their role be, if any?


I believe that rents should be used to fund governments, not governments be used to guarantee rents
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#15
Posted: 2/24/2012 5:45:39 PM
QUOTE Originally Posted by ClubDirt:

well i'm assuming you're saying many, if not all, government officials and people who profit indirectly from the government are rent seekers.  if so, what should their role be, if any?


but if it werent for that many business people/former business people wouldnt go into politics with out the secondary gain sucking off the government's teat
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#16
Posted: 2/24/2012 6:40:43 PM
i'm not sure no one sees it.  aren't the goldman sachs and bear stearns and aig's of the world the ultimate rent seekers.  isn't a mortgage backed security a great example of a meticulously guided heat seaking rent seeking missile designed to obtain wealth for people without creating anything of substance?
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#17
Posted: 2/25/2012 9:29:41 AM
QUOTE Originally Posted by ClubDirt:

i'm not sure no one sees it.  aren't the goldman sachs and bear stearns and aig's of the world the ultimate rent seekers.  isn't a mortgage backed security a great example of a meticulously guided heat seaking rent seeking missile designed to obtain wealth for people without creating anything of substance?


can you see the cat?

As to your question, refer to post 8 for the difference of RENT and INTEREST


RENT - For the use of land
INTEREST - for the use of capital

If you click on the link in this post, and 'seeing the cat' grabs your attention, here's s'more reading

click - And you needn't call a man a crank either because he can see more with his eyes than you can with yours."

link

i post this often, but cannot find a link that explains it more thoroughly, with less words- Winston Churchill on LVT


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#18
Posted: 2/25/2012 12:33:00 PM
i confess to not reading everything you posted.  i'll get to it.

before i do, is rent seeking worse than interest seeking?
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#19
Posted: 2/25/2012 12:50:02 PM
ok, i read the churchill link.  i think he's talking about san francisco.

needless to say, i don't think churchill would be pleased with what has happened here lately.

i do see some similarities between what churchill said and the goldman sachs example though.
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#20
Posted: 2/25/2012 1:19:24 PM
QUOTE Originally Posted by ClubDirt:

i confess to not reading everything you posted.  i'll get to it.

before i do, is rent seeking worse than interest seeking?


your new term "interest seeking", sounds like it refers to seeking interest, for the use of one's capital. As a Capitalist, that sounds Ay-OK to me (we can debate at what level interest becomes usurious, but that is all relative).  Rent seeking is harmful to economic activity, and so long as the publicly funded government is used to insure the rent stream to private individuals, i couldn't imagine something more detrimental to the health of a nation.  What are rent seekers providing you in exchange for the rent they seek to extract from you?




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#21
Posted: 2/25/2012 1:29:36 PM
QUOTE Originally Posted by ClubDirt:

ok, i read the churchill link.  i think he's talking about san francisco.

needless to say, i don't think churchill would be pleased with what has happened here lately.

i do see some similarities between what churchill said and the goldman sachs example though.


It doesn't matter which particular physical location (SF), you missed the point entirely. If you are interested, you're going to have to shed the assumptions you hold, and read it again.

Here's the thing with GS. Of course, they specialize in using regulatory capture, in their favor. That's their business model.  One way i use to spot the rent-seeker is, to see what purpose they serve, what they are providing, and what they are receiving in return.  Rent-seekers are middle-men. Historically, people that 'see the cat', focus first on those that seek rent from land, as land is as basic a universal need as any of us will ever utilize, and governments tend to favor the aristocratic, landed wealth (1% vs 99%).

Rent-seeking occurs in more places in the modern world. As walls said, maybe better to start simple and advance from there

there is a bounty of info on the interwebs, if the topic interests you (as it should)

I am eager of the conversation and wish more would get involved, but in the meantime, keep staring at the picture until you see the cat
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#22
Posted: 2/25/2012 2:00:06 PM
how does that not describe the grouping of mortgages (good and bad) and securitizing them and then reselling them without full disclosure?  to quote you, it creates wealth for goldman but what purpose does that serve anyone else?

to quote churchill, this applies as well: To not one of those improvements does the [MBS seller, as a MBS seller], contribute, and yet by every one of them the value of his [financial product]  is enhanced. He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived.

i do understand your points, particularly this one, What are rent seekers providing you in exchange for the rent they seek to extract from you?, but i'm not sure land monopolists have a monopoly on acquiring weather without contributing anything to the detriment of everyone else.  i think that can be found in abundance in the financial services sector. 


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#23
Posted: 2/25/2012 2:01:53 PM
the san francisco comment was a joke, although that market does seem like a good example of much of what churchill was talking about how the landowner gets enriched by factors out of his control with no effort on his part. 
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#24
Posted: 2/25/2012 2:16:40 PM
and again, i'm not saying they are the same.  i get his point here:

Land, which is a necessity of human existence, which is the original source of all wealth, which is strictly limited in extent, which is fixed in geographical position -- land, I say, differs from all other forms of property, and the immemorial customs of nearly every modern state have placed the tenure, transfer, and obligations of land in a wholly different category from other classes of property.

and that may answer my previous question and make the rent seeker worse than the one who is unjustly enriched in other sectors.  i'm just pointing out some similarities in other areas.   
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#25
Posted: 2/25/2012 2:50:31 PM
QUOTE Originally Posted by ClubDirt:

and again, i'm not saying they are the same.  i get his point here:

Land, which is a necessity of human existence, which is the original source of all wealth, which is strictly limited in extent, which is fixed in geographical position -- land, I say, differs from all other forms of property, and the immemorial customs of nearly every modern state have placed the tenure, transfer, and obligations of land in a wholly different category from other classes of property.

and that may answer my previous question and make the rent seeker worse than the one who is unjustly enriched in other sectors.  i'm just pointing out some similarities in other areas.   


absolutely, and the statement you quoted here is a rather popular one, in that it says so much with as little words as possible,,,,,,something some of us struggle with,,,,,,,,yet is important trait
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